Why Do You Think It Is Important to Study Economics?

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In this essay, it is my objective to be able to illustrate the importance and significance of economics in our daily lives. The Internet was mostly used as assistance in completing this essay. Also, the information here are gathered and reviewed from various Internet web pages and textbooks which can be found in the list of references at the end of this assignment. To begin with, I shall start with the definition of economics. There is no exact definition of economics as it varies from the opinions among economist. However, many have chosen to agree with Alfred Marshall, a leading 19th century English economist, that economics is “a study of mankind in the ordinary business of life; it examines that part of individual and social action…show more content…
Large firms which employ huge numbers of people can have a significant impact on employment conditions in an industry or region and firms with a substantial share of a market that accounts for a significant amount of consumer spending could contribute to inflation by raising their prices. Businesses can be in the legal forms of these three: proprietorship, partnership or corporation. As much as it is to know the very basics of economics, it is also important to be aware of the impact of economics on ourselves and the society. First of all, economics made me realise that possibly in the future we may face a serious problem where our resources are very much inadequate to satisfy our wants. I also learned the meaning of opportunity cost whereby I am compelled to weigh my decisions and make value judgements. Studying economics also gave me a clearer idea of how and why prices of certain products escalates and falls. On the other hand, for businesses and firms, they would benefit by being able to be familiar with the market and save costs if possible by being aware of price elasticity, buyers’ demand and also to look out for competition. With the knowledge of economics, firms can plan for short-run and long-run costs and therefore have an opportunity in maintaining profit maximisation or minimising loss. In an economic system, the government holds a lot of influence in the spending of other sectors through the
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